It has been a difficult start to the year for many D&Os. Data from the Insolvency Service released earlier this month confirmed that the number of companies entering a voluntary insolvency process has more than doubled in the first quarter of 2022 (a 112% increase) compared to the same period in 2021. This is the highest number of company voluntary liquidations since records began in 1960.
The recent company insolvency statistics for Q1 2022 show the number of company insolvencies is continuing to increase. The figures show creditors’ voluntary liquidations as being the most common procedure followed by compulsory liquidations – the number of which is more than twice as high as in the previous quarter, although still below pre-pandemic levels.
It is often the case, that insolvency claims are pursued against former directors of the insolvent company or persons connected to them. It is also often the case, that such claims are assigned to a litigation funding company given lack of funds in the insolvent estate to pursue them. This is what happened in Lock v Stanley where various claims against the former directors, their parents and connected company were assigned to Manolete.
Debtors and investors have an enhanced choice of restructuring venues as the EU Restructuring Directive is rolled out in Member States
Insolvency officeholders may need clearance upon appointment to entity in an affected sector.
The forecast for the English scheme and plan looks set fair despite concerns around Brexit turbulence.
The restructuring market’s appetite for Part 26 schemes of arrangement and Part 26A restructuring plans shows no signs of diminishing, with some debtors (Smile Telecoms and ED&F Man) even taking a second bite of the cherry. In this article, we explore recurring themes identified in the market throughout the past 18 months.
Out of the money, out of the room
The deadline for obtaining an order to suspend discharge from bankruptcy is absolute, as confirmed in the recent case of Paul Allen (as Trustee in Bankruptcy) v Pramod Mittal (in bankruptcy) [2022] EWHC 762 (Ch).
Background
Introduction
1. Covid-19 has posed unprecedented challenges worldwide. Social isolation, confinement measures, spousal hygiene and money (or lack thereof due to unemployment) have been sources of many soured relationships. As such, the pandemic’s impact on people’s personal relationships and finances have become inadvertent fuel for divorce and bankruptcy cases.
2. It is no surprise that local law firms are handling an uptick in divorce cases and receiving more enquiries related to divorce.
Summary
On 21 March 2022, the High Court in Counsel General for Wales and others v Allen and others [2022] EWHC 647 (Ch) (Re Baglan Operations Ltd) modified the decision of the Official Receiver to allow the insolvent Baglan Operations Limited (in liquidation) (the 'Company') to continue trading for a period of time to prevent environmental harm to the locality.
The English High Court has sanctioned Smile Telecom Holding Limited's (Smile) restructuring plan, despite there being no parallel restructuring proceedings in Mauritius, the place of Smile's incorporation.
Background